Tax Headlines


Michigan ~ Corporate Income Tax: Company Failed to Appeal Contested Assessment Within 90-Day Time Period

A court of claims lacked subject matter jurisdiction to grant a Michigan corporate income tax refund because notices regarding offsets constituted a “decision” or “assessment” within the meaning of the applicable statutory provision pertaining to an appeal of a contested assessment and the limited liability company (LLC) failed to appeal the offsets within the 90-day statutory period. The LLC, which was a financial services company, filed its complaint more than three years after the notices were sent.

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More Than 400,000 Organizations Automatically Lose Exempt Status, IRS Official Says

More than 400,000 organizations have lost their tax-exempt status under automatic revocation rules, Holly Paz, acting director, rulings and agreements, Exempt Organizations (EO), IRS, said on March 22. Approximately 14,000 of these organizations have applied for retroactive reinstatement, according to Paz, who spoke at the 48th Washington Non-Profit Legal and Tax Conference in Arlington, Va.

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IRS Releases 2011 Data Book (IR-2012-36)

The IRS has released the 2011 IRS Data Book, a snapshot of agency activities for fiscal year 2011. During the fiscal year, the IRS collected $2.4 trillion and processed more than 234-million tax returns. In addition to information on taxes collected and returns processed, the report also includes information about enforcement, taxpayer assistance, and the IRS budget and workforce, among others.

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Washington ~ Property Tax: Temporary Personal Property Tax Amnesty Program Now Available

Recently enacted Washington legislation, effective March 20, 2012, authorizes a county’s legislative authority to permit a local assessor to waive any applicable penalties attributable to an individual or corporation that failed or refused to deliver the requisite list of taxable personal property to the assessor that was needed for the determination of the tax due for assessment year 2011 and prior tax periods.

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All States ~ Corporate Income Tax: CCH Webinar: Handling Net Operating Losses in the Multistate Environment Scheduled for March 27

CCH Tax and Accounting is hosting a live two-hour Webinar, Handling Net Operating Losses in the Multistate Environment, on Tuesday, March 27, 2012, at 1 p.m. Eastern; noon Central; 11 a.m. Mountain; 10 a.m. Pacific. This two-hour CCH Webinar, presented by highly regarded instructor, presenter and practitioner Kathleen K. Wright, CPA, J.D., LL.M., M.B.A., will examine federal guidelines on how to compute the NOL, briefly review the federal limitations encountered in utilizing the NOL carryforward, discuss state modifications to the computation of the federal NOL and address states that have suspended utilization of the NOL and other unusual provisions applicable in 2011 and 2012.

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Losses Disallowed to and Penalties Imposed on Individuals (Barnes, TCM)

A married couple was liable for deficiencies due to readjustment of loss items and basis over several years, and were subject to an accuracy-related penalty. The taxpayers ran several businesses, including an S corporation. Over nine years, the S corporation sustained losses eight times and produced gain once, in the sixth year. On the return for the second year, the taxpayers mistakenly reported a gain instead of deducting a much larger loss, and in the third year, the taxpayers did not reduce their basis by the amount of the loss, which they did not, but were required to, deduct. This affected application of the limit on pass-through losses from an S corporation, which is equal to the shareholder’s basis in the S corporation’s stock under Code Sec. 1366(d)(1)(A), and the error was perpetuated over the following years.

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